Term Paper Price Discrimination

Term Paper Price Discrimination-57
It permits the appropriation of the consumer’s surplus so that it accrues to the producer rather than to the consumer. Implementation or Marketing Strategy: The patterns of price differentials should implement the company’s overall marketing strategy.

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Thereby he is able to charge a higher price from the richer section of consumers. Price discrimination is done only when elasticity of demand for the product is different for different buyers, the amounts demanded of the product differs at the same price i.e., the demand prices differ.

Discrimination is designed to gain revenue by varying the price in term of the demand prices of the customers. (1) First Degree Discrimination: In discrimination of the first degree the monopolist is supposed to know the maximum amount of money each consumer will pay for any quality. This is ‘perfect’ price discrimination because it is an extreme limiting case of the same.

(2) Second Degree Discrimination: It occurs where a monopolist sets different prices for different customers but does not fully exploit their potential demand prices; the monopolist captures only parts of his customer’s consumer’s surpluses.

The schedules of rates typically charged by public utilities like railways can be regarded as form of second-degree discrimination.

to charge females less, as a way to draw more females to the business on a specific night.

Price discrimination is part of the commercial and business world.

Movie theaters, magazines, computer software companies, and thousands of other businesses have discounted prices for students, children, or the elderly.

One important note though, is that price discrimination is only present when the exact same product is sold to different people for different prices. coach2) The firm can easily and accurately identify each customer.

This process is copied on numerous occasions until the marginal revenue drops to equal marginal cost.

Here is an essay on ‘Price Discrimination’ for class 9, 10, 11 and 12.

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